The rich versus the seething masses

In a remarkable column in Italy’s paper of record earlier this week, the columnist Ernesto Galli della Loggia flayed his country’s ruling class. The country is witnessing, he believes “a kind of incontinence and exhibitionism without restraint, a compulsive acquisitiveness,” rife within the highest circles of Italian society. This, mind you, after the departure of the highly acquisitive former Premier Silvio Berlusconi.

“It seems,” he writes, “that in this country, for bankers, for entrepreneurs, for senior officials, for celebrities and for politicians, for those who, in short, count for something, any reward is never enough, any privilege or treat is never too excessive, any show of wealth is never over the top.” The politicians, if not the richest, are still the most degraded, because of their elective positions of trust. The press, the justice system and the frequent leaks of the many wiretaps that Italy’s magistrates order show the snouts of a political class that are too often deep into troughs of money, luxury and privilege, funded either by the Italian taxpayer or by private interests avid for political favor.

Flaying the rich in one form or another is becoming a habit everywhere where freedom reigns in the world and even — more carefully and more dangerously — where it doesn’t, as in Russia and China, where the very rich often have the backing of the state, or sometimes, are the state. It’s happening because the financial crash is making many people poorer, and most people poorer relative to the rich, who still contrive to get richer and richer. The stagnation in middle- and working-class incomes in many parts of the Western world is often turning into real decreases in spending power. Insofar as that goes on — and a fragile improvement in Europe and North America may take hold, and once again raise all boats, or it may not — then privileges, treats and shows of wealth become more and more galling, even to moderates not previously given to envy or militancy.

In mid-19th century Europe and in the turn-of-the-century United States, novelists like Charles Dickens, Emile Zola and Theodore Dreiser drew portraits of societies corrupted by greed and the lust for money and security. Now, the task of exposing those sores pass to journalists and academics, through a slew of books on inequality, financial malpractice and political and corporate corruption. In China, where such realistic exposes are frowned on and usually suppressed, the job again falls to the novelists, with harrowing pieces like Su Tong’s Rice or Jia Pingwa’s Turbulence, among many others. Many journalists try their best: But while exposes are published, few see the light of day unless the Communist Party’s propaganda department wishes it — which often means that the story has a pre-ordered happy ending, to the effect that what has been exposed is already corrected by the party’s intercession.

There is a kind of convergence happening between the Western developed economies and the leading developing ones. In the former, especially those in Western Europe, the conditions described by the novelists, and by reformers and radical politicians, led to a growth in state provision and an expanding network of health, pension and social provision (more so in Europe than in the U.S.). This was the result of protests over the decades, reform movements of every kind and the galvanizing effect of World War II, in which the masses who fought against fascism demanded a state that adopted many of the features of social democracy.

The welfare states created then, generous by past standards, are now being cut back. This is not a return to the days when children were hauling coal wagons along underground tunnels, or paupers were consigned to the workhouses. Nevertheless, the armies of the unemployed, many of them youthful, face tougher choices than their parents and even grandparents did, coming to maturity in postwar years, when employment was relatively full and horizons of both the state and of corporations were expanding. These were times, too, when the Soviet Union and China were committed to a failing and brutal system, India was ineradicably poor and Brazil, with other South American countries, oscillated between rackety civilian governments, and oppressive military-backed ones. At the time, freedom and wealth were obvious bedfellows.

The big developing countries, democratic or not, are now facing the same kind of strains decades on. Russia’s middle class became energized at the end of last year — their demands were for intellectual and press freedom and against corruption rather than for higher incomes. The prognostications for Vladimir Putin’s third term as president frame his coming term against this newly self-enfranchised class, and find him wanting. Corruption is also the issue driving less well covered but quite large (about 20,000 people on the streets) protests in Brazil: though there, the apparent willingness of President Dilma Rousseff to tackle the issue keeps the agitation civil.

In India, a movement headed by Kisan (better known as Anna) Harare against corruption rolled through the vast state last year. It was propelled by his hunger strikes and by his embrace of Gandhian principles of non-violence — and by the huge disparities of wealth, and allegations of the creation of massive offshore accounts, out of reach of the Indian tax and justice system. After arrests and off-on hunger strikes, and often backed by big demonstrations, the Harare-led movement’s pressure forced the government to pass an anti-corruption bill in Parliament last December — which was immediately condemned by Harare as weak. The protests continue.

China is the most dramatic. The country’s poverty level declined precipitously after capitalism was pronounced glorious in the eighties, but with that, the millions of workers in state enterprises lost their security, and many were made unemployed. Often, as Washington Post reporter Philip Pan details in his fluently revelatory narrative, Out of Mao’s Shadow (2008), this was only to see their former managers and city party bosses make millions from their plants’ privatization. Pan, on a visit to a coal mine that bears dismal comparison with the pits in Zola’s Germinal, notes that in China, 4 to 5 miners die for ever million tons of coal produced, against 1 in Russia and India and 0.05 in the U.S. and the U.K. So meager is the compensation paid to the families that it is more economically rational for the owners of the privately owned mines to pay restitution than to improve safety.

Protests in China are building, and they shake the leadership. In a press conference broadcast live on Chinese state television earlier this month, the retiring Wen Jiabao warned that the growing wealth gap, corruption and increasing hatred of the state could jeopardize the economic gains. Most startlingly, he warned that “mistakes like the Cultural Revolution may happen again. Any government official or party member with a sense of responsibility should recognize this.”

In West and East, in widely differing ways, the working, out-of-work, insecure middle and angry classes grow, and become less inhibited about their anger. Huge accumulations of wealth, corruptly or legally acquired, dance before the eyes of the 99 percent, who will never acquire a sliver of such riches. This is indeed, in Galli della Loggia’s words, “incontinence and exhibitionism without restraint, a compulsive acquisitiveness.” It makes people mad as hell. Will they not take it anymore? And where will they seriously not take it first?

PHOTO: A lawyer shows his professional identification card during a protest in front of the Justice Palace in Rome, March 15, 2012. Lawyers’ guilds say the reform planned by the government of Prime Minister Mario Monti will only increase legal costs, undermine the protection of the weak, reduce expertise and unleash an uncontrolled market in fees.

Paradoxically, the rise of the rest is going to cause a rise in the status of the middle-class in both Europe and the U.S. China is increasingly not competitive on labor costs. The rising boat there is making them uncompetitive globablly and eventually they will have to focus on growing their local economy. Rising labor costs are also making the bizarre movement of goods for processing unfeasible. We are on the brink of the re-emergence of local production.

Every country should take Mr. Wen Jiabao’s warnings very seriously, as they are applicable to all of us.

The Chinese, despite being in their still early stages of development, have demonstrated remarkable wisdom in running their country.
I have a strong feeling that China will lead the world in the gradual implementation of the reforms necessary for a more “Harmonious World Society”.

Globalisation of the world economy leads to corporations, yielding the low prices the populace demands through mass production and incessant optimization. One must admit that such a model inevitably leads to wealth concentration.

If the so-called “99%” wish to close the wealth gap and more evenly distribute income, they must revise their consumption habits, favoring local/small business and empowering the middle class by increasing cash flow among the less financially fortunate.

After all, it is the “99%” who have chosen to line the pockets of the rich with their money (barring, of course, the rich who have broken laws to acquire wealth).

Perhaps, if the US government were wise and understood the history of what is happening — a paradigm shift in social/economic awareness by people around the world — it might take heed of the rising anger of its own people.

By the way, you failed to include the US in this comment “as in Russia and China, where the very rich often have the backing of the state, or sometimes, are the state”.

Contrary to popular belief, this country is and always has been a plutocracy, which means rule by the wealthy class.

Who would have thought that America would have to look to China for lessons on social stability and opportunity for achieving what the rest of the world perceives as the “American Dream”. What will the 1%, and those pathetically attempting to emulate them, do if not able to enrich themselves with arbitrage, artificial inflation, rents, and gaming the system? Would they have to actually work for a living? Perhaps be participants in a real society rather than parasites fattening themselves while draining the blood and energy of an entire nation, if not the whole world. Will I live to see the day?

@Greenspan2;
I am not sure if you and I will live to see that day, but I can assure it is coming. I have lived most of my last 9 years in China and the under 35’s Chinese are very much enlightened, indeed. They depend on these reforms for their future, and they are quietly and effectively forcing their implementation without the need for violence or revolts.
They have also very wisely been observing developments in western societies and are aware of their shortcomings.
They are very cautious in adopting western concepts, and when they do adopt some, they have always modified them to fit their particular needs.
A very poor & still oppressed, but a enlightened society, are the Chinese.

If you were a teenager such talk would get you arrested under the terrorism act.

Anyway “And where will they seriously not take it first”. Are you for real?

Tunisia, then Egypt, then Libya.

My bet for the break out from the Arab world is France. When they notice voting socialist gets you a conservative president, bound to have a scrap then. Besides, their connections with North Africa are massive.

Don’t kid yourself, this same thing occurs in China but the government keeps any backlash as muted as possible. As China continues to prosper and the hundreds of millions of rural families living an impoverished lifestyle without even electricity learn what others have, there will be more social unrest; there already is, as aforementioned.

China will prosper and a rising tide does lift all boats, but not evenly. China is akin to America in the 20th century and has tremendous growth potential. But just as in Ameerica, China will not grow without the commensurate growing pains that entail social unrest and the like.

The truth is that greed is inherent in all of us. And if we reached a level of power and impunity that made us believe we could indulge ourselves in pure glutony with no reprecussions, my argument is that it is purely human nature to do so. That is why this mantra of the 1% and their lavish lifestyle rings true in EVERY country in the world, without fail.

Heck, in America, the media portrays this “celebrity” lifestyle as the American Dream, essentially, and in that light it is socially condoned.